European Charts-Dead Cat Bounce
All European Markets rebounding today, on relatively low volume. The bounce could continue, and the squeeze we wrote of yesterday, risks killing “fundamental” shorts (short term only) as we melt up on very light volume. Below some European Index Charts. All in all we see the bounce as a dead cat bounce.
Dax has been the dog, and we expect the rebound to continue short term. Just recently today we have seen the first intraday outperformance vs STOXX in several days.
STOXX 50 looks simliar to DAX. Expect a further move up, and then a revisit of the lows. Note how close the STOXX 50 is to it’s 2009 rock bottom levels. The ones who bought the bottom are up some 30 % in two years. Worth the risk?
….and the real Dogs; Italy, Spain and Greece.